As the stock market climaxed and business boomed, it's no
surprise that the "individualized investing" rage
attracted many investors, including entrepreneurs. But in this
economy, will do-it-yourself investors make their way back to a
more traditional path?

Over the past few years, a couple of key models for customized
investing have emerged: "community stock funds," where
online members help pick stocks within a fund; and
"folios," or stock baskets, where each investor can
compile a customized fund of stocks or simply remove unwanted
companies from a preselected group. The common factor: The investor
gets more say in where the money goes.

"Folios bridge the worlds of owning stock and mutual
funds," says Nancy Smith, vice president of education and Web
content for Vienna, Virginia-based FolioFN Inc., an early leader in
the folio industry.

But are these armchair fund managers still the best-equipped
investors to ride out the storm? Especially if they're running
a business to boot?

Arguably, external issues are slowing what seems to be a natural
evolution in personal finance. Even savvy entrepreneurial
investors, worn down by slumping stocks and stretched thin by
business woes, are likely leery of any investment
opportunities-never mind ones that roam from the beaten path. The
souring stock market almost certainly contributed to the demise of
individual investment hopefuls like StockJungle.com Inc., which
shut down its community-driven mutual fund last August, and
Netfolio, a customized fund company that discontinued its service
for individuals last September.

But analysts believe letting consumers exert more control over
their portfolios is an idea whose time has come. "If you spend
a lot of time looking at your investments, not necessarily trading
frequently, this is a much more efficient way of buying and
holding," says Jaime Punishill, a senior analyst for Forrester
Research Inc.

Although he says customizing and managing a folio account from
scratch is "no small task," Punishill believes more savvy
investors, as well as professional financial planners, will embrace
folios, especially to define their investing needs socially as well
as financially. For example, they might invest in a mainstream
fund, but remove companies with poor environmental records.

Experts believe the concept of customized funds will eventually
flourish-particularly as established investment firms like Quick
& Reilly, which has already teamed with FolioFN, and Fidelity
Investments launch individual investing products.

Says Sterling, "This is a great way for average investors
to get securities at a low cost."